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Tiger Global, fickle checks and the difficulty of acceleration

 1 year ago
source link: https://finance.yahoo.com/news/tiger-global-fickle-checks-difficulty-180157487.html
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Tiger Global, fickle checks and the difficulty of acceleration

Natasha Mascarenhas
Sun, September 25, 2022, 3:01 AM·5 min read

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When On Deck had to cut its staff twice within a matter of months, its co-founders Erik Torenberg and David Booth published a memo promising to focus more. Thus marked the company’s reversal to its original customer cohort — founders in need of networks and advice.

Since that day, I’ve been digging into what happened at On Deck that led to a string of layoffs and the refocusing. We know that producitizing community has its challenges. But what are those challenges and how do they manifest beyond employees losing their jobs.

One month later, we have some answers. On Deck is spinning out half of its business, focused on career services, into a new startup slated to launch in October. Torenberg, the founder, is stepping back from his co-CEO position after only a year, returning to an executive chairman role. And the vision of an On Deck accelerator has wound down altogether, with the company just launching a fresh fund to invest in startups at market terms. I learned how a plucked Tiger Global term sheet was one of the first dominoes to fall, per sources, forcing the company to prioritize growth over runway.

Even if you don’t care about the intricacies of this one startup, On Deck’s pivot and challenges offer a window into the complexities of building a business. Especially after last week’s Launch House news, I think it’s fascinating to see two examples of how startups trying to provide a network in exchange for equity and/or money hit growth pains at different points.

In Launch House’s case, allegations underscored poor leadership. In On Deck’s case, product changes underscored a fragmenting focus. Both, while extremely different stories, have explained how selling something as vague and broad as “community” isn’t that simple to pull off. I’ve spoken a lot about how a community is more than a Slack group where people trade ideas; it's living, breathing and requires more than just expression. That in and of itself is hard to force but add in the exponential growth needs of a venture-backed startup and the tradeoffs begin.


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